Injective proposes to further exacerbate deflation by reducing the supply of INJ tokens.

Injective (INJ), a public layer 1 blockchain based on Cosmos, has unveiled a new INJ 3.0 proposal that aims to further encourage deflation by reducing the on-chain parameters associated with creating new INJ tokens. Governance discussions are currently underway in the Injective forum, and voting on the proposal is scheduled to take place until April 19th.

Injective predicts that lowering the inflation rate limit for INJ tokens would make INJ tokens one of the most deflationary cryptocurrency assets, potentially surpassing Bitcoin. This adjustment is similar to Bitcoin's halving event.

Moreover, a controlled reduction in the inflation rate limit will ensure that INJ maintains its status as an ultrasonic currency. By balancing token scarcity with incentives for participation, Injective aims to build a sustainable ecosystem that rewards early supporters while attracting new participants.

Ultimately, increasing the inflation rate change parameter to 0.5 will allow the protocol to respond more quickly to changes in staking activity. These adjustments encourage staking of more assets and improve deflation characteristics more quickly, ensuring the protocol remains adaptive and resilient.

Injective implemented the INJ token burning system and has burned 5.9 million tokens to date.

Injective is an interoperable blockchain designed to facilitate the creation of advanced Web3 financial applications. Developers can develop a variety of complex applications by taking advantage of a variety of custom modules, including decentralized order books, binary options, and real assets (RWA) modules.

INJ serves a variety of purposes within the Injective ecosystem, including staking to secure the network and participating in governance processes. Notably, since the launch of the Injective mainnet, weekly token burn auctions have begun, reducing INJ supply over time.

The token burn system will be expanded with the implementation of INJ 2.0 in August 2023, allowing all decentralized applications (dApps) operating on the Injective network to participate in weekly burn auctions. This plan facilitated the burning of larger amounts of INJ tokens each week. Approximately 5.9 million INJ tokens have now been burned, which amounts to a value of approximately $190 million at the time of writing.

Injective proposes reducing INJ token supply to create more deflation appeared first on Metaverse Post